In March 2014, Facebook announced the acquisition of Oculus. Before that, this low-key VR device, game software vendor, perhaps only professional players can call its name. After the acquisition, VirtualReality (virtual reality) began to enter the people's field of vision, and in the next two years, the rapid development of the wildfire.
Shenzhen Huaqiang North SEG factory shop, the reporter roughly strolled around, found no less than five stores engaged in the VR industry. In the past, most of the mobile phone spare parts stores were replaced by drones and VR headsets.
Li Feng (pseudonym) runs a storefront in which VR glasses and all-in-one machines are available. After the customer places an order, the factory in Baoan can process and produce. Within half an hour, Li Feng repeatedly picked up the phone or used the mobile phone WeChat to reply to the customer. She told reporters that the company has recently placed a lot of orders, and the best sellers are VR glasses.
What is not the same as the hot scenes of these stores is the chilling of the VR industry in the investment community. According to the CBInsights data of the US third-party venture capital data company, compared with the first quarter of this year, both the amount of investment and the amount of money in the second quarter have not decreased.
Facebook big mergers drive industry
"From a certain point of view, in fact, the formulation of VR winter is not very accurate, because it has not really heated up." Qiu Jun, managing director of Yunjiu Capital, told the "First Financial Daily" reporter.
Two years ago, Qiu Yi began to pay attention to this field, but there are not many targets for investment, so he is always on the sidelines.
According to the "Internet + Film and Television Industry Research Special Report", from the beginning of 2015 to the present, the number of enterprises in the VR industry has exploded from more than 200 to more than 1,600.
Qingke Private Equity Data shows that in the past year, there have been no fewer than 145 cases involving VR industry in China, involving an amount of 4.434 billion yuan.
Qiu Jun told reporters that the current "VR investment fever" at home and abroad mainly relies on the strategic investment department of large companies and some new small funds known as VR.
For small funds, it has more speculative nature. "This is a concept after all, and it is beneficial to them. It is a differentiation, or how to compete with other big funds when it comes out." Qiu Jun told reporters.
For large companies, complementing existing product lines is the main driving force behind VR projects.
Time back to the beginning of 2014, Facebook announced the acquisition of OculusVR for $2 billion and plans to expand it beyond the game. "After the game, we will make Oculus a platform for a variety of other experiences. Historical experience shows that there will be more platforms in the future. Today's acquisition is a long-term investment in future computing," said Facebook CEO Zuckerberg.
The acquisition seems to complement the Facebook game business in the industry. For Facebook, the future of the game is the focus of their revenue, but most of their games are casual games, and there is no special hardware. The acquisition of Oculus can help them enter. Host games (hardware), as well as areas of heavy players. This way of pinning new technologies to bring new growth points has been borrowed by many companies.
"I did not expect this acquisition to drive the entire industry, many other companies believe that VR will be the next direction, so they have layout, domestic such as storm, pure video business has been weak growth, must find a new direction, so locked the VR hardware as an entry. "Qiu Yu said.
In addition to Facebook, when mobile phone giant HTC fell to the bottom in 2013, VR business became its lifeline. In June of this year, HTC Chairman Wang Xuehong made a full bet on the VR industry, split the VR business into an independent subsidiary, and led 28 venture capital funds to form a consortium specializing in VR investment, with an investment scale of 10 billion US dollars.
After Facebook and HTC, more and more giants are rushing to enter the field. This year, the world's largest financing amount comes from two augmented reality technologies. MagicLeap and Meta received US$794 million in Series C financing and US$50 million in Series B financing respectively. The main investors are Chinese IT giants such as Ali, Lenovo and Tencent. "(They) are driving each other, everyone is afraid of falling behind, being robbed of the opportunity by others, and investing far before the market and users." Qiu said.
For institutional investors, waiting is the attitude of VR over the years. Many investors still think that it is too early for VR technology to talk about the market size. The immature technology and the frequent addition of giants have increased capital. The risk of investment.
Obviously, under the current technology, the VR market has gradually become saturated. Taking VR head display as an example, the shipments of a large number of companies have not reached expectations. Last year, HIS, one of the world's largest economic and financial analysts, predicted that HTCVive would reach 440,000 units. However, it actually sold only 140,000 units this year.
VR helmet "90% of startups have closed down"
The wait-and-see attitude of the venture capital directly affects the VR entrepreneurial team in a development dilemma: the entrepreneurial team that is difficult to be seen by big companies and is unwilling to succumb to small funds can only face two choices: fall or transformation.
In 2015, when Fang Wenxin created the squid technology, he never imagined the current situation. "I remember that there were two or three hundred helmets in 2015. There may be less than ten left now. This technology has passed, and 90% of startups have closed down." He said to reporters.
In the second half of the year, the Storm Mirror team laid off a large area. At the same time, Mido Entertainment and the public view also sent a message of arrears. For a time, the industry ushered in a trough, and many people believed that the VR industry has quietly arrived in the winter.
In ODM, OEM and other manufacturers, this low pressure has disappeared, and it is accompanied by a continual replenishment of production.
Prior to the advent of VR, Li Feng's company was mainly engaged in OEM production such as smart wear. In the past two years, with the VR concept in the market, the production line was gradually put into the development and production of glasses and integrated machines.
IDC Group's research results show that more than 90% of mobile phone boxes are currently used in the consumer market, while most of the high-end VR devices are used in the commercial market, mainly based on offline experience stores.
"This is an area that will definitely get up. At that time, whoever enters first will win the market first. Our company has made a lot of offline experience halls for this." For the future VR market, Li Feng is very confident.
People like Li Feng are not in the SEG factory store in Huaqiang North. In another store of the same type, the owner told reporters that the best-selling model is a VR glasses costing more than ten yuan. . These factory stores generally do not sell stand-alone machines, only wholesale, and provide the public model needed for production.
Under the recommendation of Li Feng, the reporter tried a VR all-in-one with a 2K screen. In addition to the scene diversion, the basic operation was smooth. Li Feng proudly told reporters that this is the VR machine that is better than the greenhouse in the domestic market.
However, when reporters asked about the sales of this all-in-one, Li Feng said that the demand for the all-in-one machine is not big now: "The market has not opened up, and next year should be the hot sale of one machine."
So what kind of VR products do the market prefer?
The reporter found on the Taobao page that the most popular products are VR glasses that sell for around 100 yuan. According to the reporter's visit, the cost of such a box ranges from 20 to 50 yuan.
In Li Feng's shop, the reporter saw a glasses box with Bluetooth control, which told reporters that because of the Bluetooth control, its price is higher than the average box. If you do 1000, the single price can be reduced to 48 yuan. After such a box is labeled, the price can reach 100 yuan.
"Now only the box can make money, the higher the end, the less money." Fang Wenxin told reporters.
On the one hand, the box price is cheap, reducing the cost of trial and error for consumers; on the other hand, the VR experience introduced by iQiyi and other video platforms will also promote the glasses box in the C-end market.
Looking for just needed
For C-end consumers, buying a VR glasses is more of a catering to the current VR concept.
At the high-tech fair, the reporter interviewed many VR equipment providers. A sales manager who worked on VR solutions in Shenzhen told reporters that most of the inquiries were made to order VR boxes in bulk.
"Now the boxes are basically foreign orders, the United States and South Korea are the two major export directions." Li Feng told reporters that the company recently took orders from Wal-Mart and many Korean institutions.
At the just-concluded Hong Kong Global Sources Electronics Show in the fall, a mobile phone VR box of 50 yuan is the best-selling product, which is ordered by the largest number of foreign manufacturers.
Foreign customers have a strong interest in novel and affordable electronic products. These low-priced products are sold overseas and are often sent out as promotional gifts. VR's novel concept makes many 4S stores and hypermarkets fancy, and purchases thousands of VR boxes at one time, which are specially used to be attached to customers. “It doesn’t cost too much price to reflect the company’s thoughts on gifts.†The effect that the organization hopes to achieve.
In the personal consumer market, this kind of hunting psychology also exists.
According to the “China Virtual Reality Industry Research Report for the First Half of 2016†released by the third-party data agency Ai Media Consulting, although there have been many VR headset glasses products in China in recent years, the consumer market has responded generally, and the purchase intention is no more than 30%, 71.3%. Chinese mobile phone netizens will not buy related virtual reality products, mainly because the price is not equal to the current technology level.
In this case, curiosity and early adopters allow consumers to choose higher-priced products such as VR glasses instead of one-piece machines.
"The biggest advantage of the glasses box is that it is cheap. Anyway, if you spend a few tens of dollars, it will not be easy to throw it." The high-tech fair exhibitors told reporters.
In fact, the cost and technical content of such boxes are not high, and relying on certain topics and gimmicks can increase their sales. On foreign crowdfunding websites such as Indiegogo, the reporter saw many types of glasses boxes, and many startup teams bundled them with mobile content and apps, including the second element, games and pornography.
For high-end technology, it is currently suffering from the C-end market.
"Now the VR industry, the pattern has been set, everyone is doing B-end products, C-end is not making money." Fang Wenxin's gesture recognition technology is mainly used in Vive, Oculus and other head-mounted devices.
It has just approached the investors to complete the Pre-A round of financing. The specific financing amount and news will be announced at the end of the month. Fang Wenxin told the reporter that at this festival, financing is not easy.
The C-end products have higher technical requirements, and the giants enter the opportunity to kill these entrepreneurial teams; the B-end products have low technical requirements but need perfect supply chain resources. The entrepreneurial team does not have these two advantages, and it is easy to cause “high or lowâ€. Not the situation.
Next stop AR?
Huaqiangbei's merchants are still immersed in the meager profits brought by VR, and the direction of capital has quietly moved to the next step.
According to CBInsights data, although the number of investments in the AR field in the second quarter of 2016 could not keep up with VR, the investment amount exceeded VR.
The first quarter was the peak of AR investment, mainly due to MagicLeap's $794 million Series C investment. Even without MagicLeap, the AR sector still received $300 million in financing in the first quarter; the second quarter AR financing was $72 million. At the current rate, the volume of transactions in the AR sector will increase by 40% compared to last year.
The experience is too heavy, and the C-end user market is unclear, which is why investors are withdrawing from VR. "At present, VR is basically only suitable for user scenarios of heavy games, or some very vertical industry applications, and it is still far away from the average family." Qiu said.
In comparison, AR has a wider range of applications and is close to the people.
Su Bo, a Shenzhen-based augmented reality company, told reporters that the third-generation augmented reality glasses currently being developed by the company will be put into mass production, which will be delivered to the State Grid, Jiangling, and strategic machine maintenance trials. This also represents the three potential directions of the future AR equipment in the production field: electricity, manufacturing and military.
In line with this trend, Fang Wenxin divided the squid technology business into ThisVR and ThisAR, applying gesture recognition technology to VR and AR respectively. Like investors, he believes that AR has more application scenarios. "VR has not been voted for, and our current investors are entering because of the application in the AR field. Gesture recognition can be transferred from VR to AR."
From hot to cool, VR took less than two years. "Unlike the Internet and O2O's heat, the demand in those areas is real and verified, but it has been over-amplified for a period of time, causing overheating. It is now reasonable to cool down." Qiu Jun told reporters.
Whether it is VR or AR, to enter the C-end market, you need to overcome multiple technical difficulties, including how to make the display more natural and reduce the stun effect.
Fang Wenxin told reporters that future capital investment in AR technology will focus on the three core technologies of optical modules, gesture control and SLAM (simultaneous positioning and mapping of robots).
However, for the startup team, it may have missed the best opportunity to get on the bus now. "Hardware or integrated machine development, I don't think there is still a chance. Assuming that this market really exists, in the end Apple will kill them when they have something out, which is exactly the same as the cottage smartphone of the year; and if this market does not exist, of course Everyone is busy," Qiu said.
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